Chinese come to rescue of A.C.'s stalled Revel project
China’s biggest property company is investing $1.7 billion to complete Revel Entertainment’s unfinished casino resort on the Atlantic City Boardwalk.
China State Construction Engineering Corp. is teaming up with real estate developer Tishman and Revel to complete the $2.5 billion casino and hotel by July 2011.
The project was originally scheduled to open next year, but progress ground to a halt when financing dried up during the global credit crunch. In late January, Revel Entertainment Group CEO Kevin DeSanctis announced that all interior work on the project was being stopped. The economy was tanking. Credit had dried up. About 400 construction workers were laid off.
Beijing-based, state-owned CSCEC has been involved in a number of China's most prestigious building projects, including Beijing's National Aquatics Center, Hong Kong's Disneyland and the Shanghai World Financial Center. Other projects in the pipeline include several domestic railway projects as well as $1.92 billion contract to build a resort in the Bahamas.
China’s massive stimulus spending program on infrastructure and other construction related projects have helped as well. CSCEC reported a net profit of 2.35 billion yuan (US$344 million) for the first half of 2009 on 111.3 billion yuan ($16.3 billion) in revenue.
In late July, CSCEC raised more than 50 billion yuan ($7.3 billion) from investors in an initial public offering on the Shanghai stock exchange. The flotation was the world's biggest IPO since Visa raised $19 billion 16 months earlier.
In Atlantic City much is riding on Revel’s completion, both psychologically and financially, analysts and casino operators say. Atlantic City has been suffering through a couple of terrible years, revenue-wise. Three other large-scale resort casinos were planned for the city but were put on indefinite hold last year.
But things will improve, DeSanctis believes, telling The Philadelphia Inquirer recently that he sees credit markets loosening.
“They’ve improved a lot. Whenever you deal with something not in your control, it’s hard to be confident. But we continue to see improvement, and more and more deals are getting done,” he said. “I am more optimistic today than I was six months ago.”